Article

E-invoicing in Australia

22 February 2022

What you need to know

This article takes a closer look at the Australian e-invoicing scene and what’s going on to make sure Australian businesses start to reap the benefits of electronic invoicing.

This article takes a closer look at the Australian e-invoicing scene and what’s going on to make sure Australian businesses start to reap the benefits of electronic invoicing.

First of all, you need a PEPPOL certified Access Point Provider to help you connect to e-invoicing. Unimaze should be your to-go-to Access Point Provider in Australia. Simply put, this post is a comprehensive guide for private businesses on everything they’d want to know about electronic invoicing in Australia.

Australia e-Invoicing Overview

For starters, e-invoicing isn’t anything new in Australia.

Even so, only 10 to 15 percent of the 1 billion invoices exchanged between businesses in Australia are e-invoices.

That’s about to change.

On September 29th, 2020, the Australian government announced the Digital Business Plan, an 800 million AUD initiative to support the digitization of businesses.

Part of the funds allocated to the plan will go toward the mass adoption of e-invoicing by the private sector.

More specifically, the plan will allocate up to 3.6 million AUD to ensure that the nationwide adoption of e-invoicing in Australia by the private sector takes full effect before July 1st, 2022.

The plan intends to pave the way for 80 percent of invoices to be received electronically by July 1st, 2021, across all levels of government and the private sector.

The Australia e-invoicing strategy is to make sure that as many businesses as possible adopt the use of e-invoices. The authorities will then pass the e-invoicing legislation to make it mandatory for every Kiwi business to use e-invoices.

How Will Electronic Invoicing Help the
Australian Private Sector?

The primary reason Australian authorities are supporting the digitization of Kiwi businesses is to make the economy more competitive and dynamic.

Standardized invoicing across all sectors of the economy could save the country a whopping 10 billion AUD per year.

Put differently; the Australian economy will get an injection of about 10 billion AUD with the adoption of e-invoices.

Beyond the economy, electronic invoicing in Australia will immensely benefit the private sector.

Here what ditching paper invoices and shifting to e-invoices means for various players in the Australian private sector.

Larger Businesses

Larger businesses in Australia that adopt electronic invoicing will benefit from improved payment processes.

Large organizations tend to struggle with making payments on time, but e-invoicing allows them to automate their Account Payable processes. The ripple effect is a shorter payment period, even with a high number of vendors.

In short, e-invoicing will enable large businesses in Australia to connect vendors directly to their enterprise software solution, making it possible to complete batches of payment in a few clicks.

Small Businesses

Small and medium enterprises (SMEs) that take advantage of Australia’s electronic invoicing campaign will eliminate errors caused by manual data entry.

In essence, this means SMEs can be sure their e-invoices will be accurate. That will reduce delayed payment and increase transparency. Adoption of e-Invoices will also help improve the relationship between SMEs and their customers.

Large Distribution Businesses

Large businesses can use an e-invoicing solution to connect their ERP systems to their retail customer’s accounting software.

The benefit is fast and swift sharing of transactions, reducing data entry, and improving cash flow in the process.

For buyers

E-invoicing reduces costs as traders no longer need to use expensive and unreliable manual methods to record supplier invoice information.

When implemented correctly, an e-invoicing solution helps eliminate processing errors as the exchange of e-invoices is electronic.

For Suppliers

E-invoicing helps them receive payments on time from buyers. It also helps enhance the opportunity for suppliers to participate in a buyer-led payment process.

PEPPOL in Australia

Australia intends to adopt the PEPPOL interoperability framework to roll out e-invoicing.

To that effect, the Australian Taxation Office (ATO) became a PEPPOL authority in 2019. Further, ATO developed local invoice specifications as per the PEPPOL BIS Billing 3.0 standard.

The PEPPOL BIS Billing is an Electronic Data Interchange (EDI) standard format.

It is essential to note that ATO is the body that accredits Access Point providers in Australia.

In essence, this means that ATO decides which service provider will help Australian businesses connect to the PEPPOL network.

Sidenote – The first requirements to start using e-invoicing for Australian businesses are;

Use an accredited PEPPOL Access Point provider that converts data messages to the structures and specifications of the PEPPOL network.

Use e-invoicing software that can transform e-invoices from your ERP system to the PEPPOL BIS Billing 3.0 standards.

… and that’s where Unimaze comes in.

Unimaze – Your PEPPOL Access Point Provider in Australia

Unimaze is a certified Access Point in Australia by PEPPOL authorities in the country.

We will set up your e-invoicing software and upgrade your ERP systems to match the PEPPOL BIS Billing 3.0 standard requirements.

As one of the top e-invoicing service providers in Australia, we have the infrastructure to enable you to send and receive unlimited e-invoices, further improving the way you transact with your trading partners.

On top of that, we’re dedicated to making sure that your transactions with Accounts Payable and Accounts Receivable operate in harmony.

We even have a free e-invoice generator to help you create invoices in a few clicks.

Plus, our notification system keeps you informed and up-to-date regarding the status of your issued e-invoices.

Ready to get started?

Good!

GET STARTED!

FAQ’s

  • Is e-invoicing mandatory?

Electronic invoicing in Australia isn’t mandatory yet.

However, the adoption of e-invoices is the Australian’s government scope and one of the crucial strategies of the plan for economic recovery.

The government intends to promote the optional use of e-invoices with Access Point providers then pass e-invoicing legislation to make the practice mandatory.

  • What is a valid tax invoice in Australia?

For an invoice to be acceptable in Australia, it must include the following;

  • Information showing that the document is indeed a tax invoice
  • Information of the seller
  • The sellers ABN
  • Date of issuance
  • Details of the transaction
  • The GST amount
  • The extent to which the sale indicated on the invoice is taxable
  • Can I Invoice Without an ABN?

When you pay a supplier for goods and services, that supplier must quote an Australian Business Number (ABN). The supplier can quote the ABN on the invoice or any other document that shows they delivered goods or services to you.

If a supplier doesn’t provide the ABN, you may have to without some amount from the payment for that specific supply – that’s what we call the “no ABN withholding.”

Even so, some suppliers don’t need to provide an ABN to the buyer. In such cases, the supplier can use the form statement to prevent the buyer from withholding part of the payment.

  • Will I be charged to receive e-Invoices?

No, you won’t be charged. You’ll have to register to receive e-invoices though. To send electronic invoices, businesses in Australia must use e-invoicing software connected to the PEPPOL network through an Access Point Provider such as Unimaze.

  • What if I try to send an electronic invoice to a trading partner who isn’t registered to receive them?

The Unimaze e-invoicing solution will check if your trading partner can receive e-invoices. If they’re not registered, we’ll notify you promptly.

  • What should an invoice include in Australia?

Here’s what you should know about invoicing in Australia.

First, there are various types of invoices.

-If you operate a business;

Registered for goods and services tax (GST) – You will need to provide tax invoices.

Without GST – You will use regular invoices. However, you shouldn’t include the term “tax invoice.”

For GST-registered businesses, a tax invoice will indicate that you included GST in the price of your goods or services. Note – your customers will need a tax invoice to claim for the GST.

-For custom-designed invoices

These are made as per the requirements of your business. You can use the Unimaze Invoice Generator to create such.

Still, be sure to include the mandatory elements, including;

  • The word “tax invoice”
  • The identity of the seller
  • Your Australian Business Number (ABN)
  • The date of the invoice
  • Details of items or services sold
  • The GST amount payable

Note – you can send your invoice via post, printable web page, email, deliver in person, or through e-invoicing.

  • Is there a time limit on invoicing in Australia?

There’s no specified time limit on invoicing in Australia. Still, you must send an invoicing within a reasonable time.

The meaning of the term reasonable may vary depending on your industry and state you’re in. However, the statute of limitations allows you to take legal action to recover money owed to you within six years of the date you received the last payment.

Adopting e-Invoicing helps get your invoices to trading partners in real-time, thereby increasing the chances of getting paid on time.

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